Below are five facts that everyone should know about the matrimonial home.
- Contrary to very popular belief, the matrimonial home does NOT automatically get divided 50/50. The matrimonial home (like any other asset) is included in a party’s net family property to determine the quantum of an equalization payment. If the house is jointly owned, half of the value of the matrimonial home would be attributed to each party’s net family property to determine the proper quantum of an equalization payment.
- Both parties have an equal right to possession of the matrimonial home after separation. This right to possession exists regardless of whose name the matrimonial home is registered in. This means that absent a court order, a party cannot lock the other party out of the matrimonial home. This often creates a “War of the Roses” scenario (referring to the 1989 film and not the actual wars in England) which forces separated parties to continue to live separate and apart under the same roof until some or all of the issues are resolved.
- A party is not allowed to encumber (i.e. mortgage, registered line of credit) or transfer the matrimonial home without the other spouse’s written consent. For this reason, it is important for spouses to: (a) not blindly sign any document that is given to them regarding the matrimonial home unless they understand exactly what it means; and (b) not necessarily agree to encumber the matrimonial home if the funds from the mortgage/registered line of credit, are going to benefit one party only.
- It is possible to have more than one matrimonial home. For example, a family can have a main residence that is a matrimonial home and a cottage that is also a matrimonial home. While the issue of whether or not a property is a matrimonial home can be in dispute, very generally a property will be considered a matrimonial home if it was enjoyed as a family during the marriage. Note, that matrimonial homes will never apply to common law spouses.
- There is an odd inclusion in family law legislation that if a matrimonial home owned on the date of separation is the same matrimonial home that was owned the date of marriage, the spouse who owned the matrimonial home on the date of marriage does not get a date of marriage deduction for it when quantifying the equalization payment owing. For this reason, many people who own a matrimonial home on the date of marriage choose to have a marriage contract that bypasses this portion of the legislation so that they can claim the date of marriage deduction that is otherwise lost.